AID Partners invests in Prime Focus' movie special effects unit
Hong Kong-based private equity firm AID Partners has invested $10 million in Prime Focus World (PFW), a global entertainment services company and wholly-owned subsidiary of Indian media company Prime Focus.
AID Partners, which focuses on investments in the media and entertainment sector, made the investment through the purchase of optionally convertible preference shares of PFW, which can be converted to 4% equity. The deal values the subsidiary at $250 million.
PFW is the world's largest provider of 2D to 3D content conversion, visual effects and animation services. The Great Gatsby is among the company's upcoming movie projects, while previous projects include Star Wars: Episode One - The Phantom Menace, Transformers: Dark of the Moon, Avatar and Wrath of the Titans.
"Prime Focus' unique model of striking the right balance between technology, creative and financial imperatives, continues to make it a valuable investment, " said Namit Malhotra, chairman and CEO of PFW, in a statement. "Today it is heartening to see a discerning investor like AID Partners find such value in this company."
AID Partners is the only independent investor to back PFW. However, Standard Chartered Private Equity invested $70 million in parent company Prime Focus last November, paying $35 million for a 19.71% stake and investing an additional $35 million through non-convertible debentures (NCDs). In December 2012, Prime Focus successfully redeemed foreign currency convertible bonds (FCCBs) worth $79 million.
Prime Focus will also enter into a joint venture with AID Partners and Zhejiang Jingqi Wenhua Chuanbo Company to offer visual effects and 3D conversion services to the movie industry in the Greater China area.
According to the Chinese State Administration of Radio, Film and Television, China's 2012 box office receipts increased 30%, largely driven by imported films. China now ranks as the world's second-largest box office, next to the US.
"3D and visual effects are now key elements of big budget films. With the increasing budgets of tent-pole movies, there is a tremendous demand for world-class 3D and VFX services," said Kelvin Wu, principal partner at AID Partners.
AID Partners recently acquired a 100% stake in HMV Asia, a former unit of the ailing UK record store chain. Other previous investment s include the Asian operations of movie production company, Legendary Pictures.
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